Life New Ireland Total Care Policy

3rd Gen

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Hi Guys

My wife and I have a joint life policy that gets more and more expensive every year.

FYI - I know very little about life insurance and the make up of the policies.

Anyway, my policy limit appears to grow by 5% every year. We have the policy about 5 years and we purchased our house for 585k. The life cover that is now in place has grown to €716k. The value of our home is now about 380k and amount left on the mortgage is €465k.

The policy is costing us about €110 a month now and again this appears to go up every month.

Is this the correct policy for us (in our mid 30's) or should we get out of this and look to have the amount brought down to the amount of our mortgage?

There is also an encashment value of €115. I dont know what this is!

Any advice would be much appreciated.

Regards & thanks

3rd Gen
 
What made you take out this Policy where all you required was a Term Life Policy. The purpose and requirements for Life Insurance on PPRs is to cover the outstanding mortgage. There is no way as to why you should have life cover for the amount stated which is near double the outstanding mortgage amount.

You are going to have to check through your papers and check what was originally requested. Personally this sounds like a piece of mis-selling. Could be a case for the Ombudsman to get a refund of the overpayment and overcharging on premiums.

It might be best to obtain a quote for full life or term Insurance for the outstanding amount. Whoever sold you the policy is laughing their heads off at you, earning constant increase in commissions.

Go for it General and teach these lousers a good lesson.
 
Not necessarily misselling, maybe the OP thought it sounded like a plan at the time to have an index linked policy based perhaps (and I'm assuming here obviously) on them buying the house, maybe having a few kids etc, maybe no death in service benefits, so maybe the idea of a lump sum left over should they pop off with dependants and maybe other debt might have been attractive.

For the amount of cover it may not be that expensive, however you are right they don't need that level of cover for the mortgage itself and can of course take out a lower policy and a separate one to provide extra cover if needed.

I agree too that the whole of life ones are bad value, simple term insurance will do, kind of like a convertible option built in too if reasonable cost.
 
I agree too that the whole of life ones are bad value, simple term insurance will do, kind of like a convertible option built in too if reasonable cost.

I do not think that whole of life policies are bad value at all. These are a great way to build up a fund for the next generation after the policy holder passes on.

In the case of the OP all he needed was a joint life, second death Policy, applicable to the mortgage amount. The only difference would have been should have been whether whole life or Term Cover was required.

I'm sorry to state that on the information given by the OP, it appears that this is a case of mis-selling and it does need to be challenged.

Now to qualify my posts, I am not a broker or involved in the Life market or any other investment broker business. All I am is a punter that has been turned over by the Banks in this country. Thankfully I came out the right side of it.
 
I do not think that whole of life policies are bad value at all. These are a great way to build up a fund for the next generation after the policy holder passes on.

Guaranteed premium whole of policies, yes. Reviewable whole of life policies, no. The latter allow the insurer to keep hiking up the premium as you get older until eventually the price is unsustainable.

In the case of the OP all he needed was a joint life, second death Policy, applicable to the mortgage amount.

I presume you mean joint life, first death. A policy that only pays out on second death, while suitable for inheritance tax planning, would be unacceptable to a lender as cover for a mortgage.
 
Guys. Thanks for the advice. Perhaps I should shed some more light then considering the allegations of mis-selling.

At the inception of this policy I would have had 2-3 other life policies as I had been advised to take out the policies on the purchase of other investment properties.

I got sense (kind of) about 5 years ago and I (not mortgage broker) cancelled all but one of the policies which is for €150k. I currently have 2 Investment properties and the purpose of this policy is that if I die the €150k will go towards writing down the negative eguity and bringing them into postive equity. My spouse can then decide to continue managing them or disposing of them post my death.

I used the same Mortage broker for all purchases so they would have had full knowledge of all my policies at inception. I feel as if i have been hoodwinked here.

Furhter comments are welcomed and previous ones are appreciated.

3rd Gen

EDIT - FYI the mortage that the policy is linked to is a full term Interest Only mortage. This may or may not be relevant.
 
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I'm sorry to state that on the information given by the OP, it appears that this is a case of mis-selling and it does need to be challenged.
Gee's Mercman that is some jump to make from reading the OP, how do you make that out?

I personally have a level term insurance policy for a multiple of my mortgage and I did not mis-sell myself!

Yes the OP should check his paperwork if he did not fully understand what he was taking out at the time and if it is clearly documented that he refused the recommended standard Mortgage Protection Insurance and the reason why he wanted a WOL policy then that's not a case of mis-selling is it?
 
The purpose of Life Assurance on a PPR mortgage is to ensure the family home in the case of a death of the policy holder. As the mortgage value declines the Insurance cost should decline as well.

Howver in this case the amount is increasing but the mortgage is decreasing.

Now if the OP has left out information or there is another angle to this, fine. Otherwise I class this as pure mis-selling. In this regard he needs to check his paperwork. We will await to hear their next move.
 
FYI the mortage that the policy is linked to is a full term Interest Only mortage. This may or may not be relevant.[/COLOR]

If you are on an interest only mortgage, are you making payments off the mortgage separately ? There seems something strange that you have used the same broker and he has tied you up in this product.

Obviously he was concerned at the commission he was losing from the stopping of the other policies. Sounds very smelly. What part of the country are you based ??
 
Hi guys. Thanks for all the feedback.

I'm making very small amounts due to financial circumstances that are well documented on this site!

I'm based in Dublin (north side) and work in city centre.

Concerned with what merc had said and it has struck a bit of a chord.

Where to next?
 
This is what is known as a reviewable whole of life policy. Personally I think they are bad value for money. I wrote a piece about them some time ago.

Liam, I think it's just an indexed linked term policy. Not quite as bad as those evil unit linked ones!! Edit: Just read the name of the product, yep, it's a unit linked plan. So rubbish New Ireland don't sell them anymore.

One of the consequences of the Central Bank disclosure requirements is that is bamboozles clients. Clients want to fill out a proposal form and the advisor turns up with a mountain of paperwork that he has to go through before the proposal form can be completed.

While the make up of the policy may have been explained and clients sign the reasons why statements, the bits and pieces are simply not that important at that time. It is when the power of compound takes effect a few years down the road that the client starts questioning things. Some insurers offer very cheap initial premiums but the indexation is 8% per annum, compared to 3% with other providers who have higher initial premiums.

Unfortunately for many, it is a case of reading the paperwork that you are given. Adivsors can highlight the important bits but in many cases, people don't take this on board because they have lost interest because of all the paperwork.


Steven
www.bluewaterfp.ie
 
Adivsors can highlight the important bits but in many cases, people don't take this on board http://www.bluewaterfp.ie

Advisers for the company concerned are only interested in their commissions. The company needs to be called to account for their shabby practices and some of their irregular practices which are kept under the carpet.

Possibly and probably I know too much but it will come out into the open very soon.
 
What's kept under the carpet? In most industries, a seller does not have to disclose their mark up. In retail, you can work off them buying stock for a 1/3 of what they sell it to you at.

In mine, I tell all clients exactly what I am making and am very clear about that. It is right above the place that they have to sign. If other advisors do not disclose what they are earning, they are in break of the Consumer Protection Code and should be reported to the Central Bank.

So if you know too much, get in contact with the Central Bank and report these people.


Steven
www.bluewaterfp.ie
 
So if you know too much, get in contact with the Central Bank and report these people. http://www.bluewaterfp.ie

The persons concerned lost their license to sell Financial products but guess what they are out there selling similar product and in one case NI product. Central Bank couldn't give a damn. The Fitness and Probity section have been well informed but nothing done. But in one case I am privy as to why they are kept selling the product.
 
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